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Peoples Republic of China trying to con Bangladesh by jacking up interest rate on financing of tied aid projects.

China has asked Bangladesh to convert part of the credit it promised during its president’s Dhaka visit to commercial loans.

Converting soft loans into commercial credit means Bangladesh will have to pay higher interest for the fund.

Bangladesh signed $25 billion deals with China for nearly two and a half dozen projects during President Xi Jinping’s visit to Dhaka in October last year.

Li Guangjun, economic and commercial counsellor at the Chinese Embassy in Dhaka, made the proposal during a recent meeting of the Joint Economic Council, according to a senior official at the Economic Relations Division or ERD.

However, the ERD official said in the face of resistance against such proposal, China showed the sign of softening its stance. ………………………

Last year, Pakistan held informal talks with General Electric, Siemens and Switzerland's ABB to build the country's first high-voltage transmission line. Chinese power giant State Grid committed to building the $1.7 billion project in half the time of its European counterparts – and clinched the deal.

As China makes its "Belt and Road" initiative...Chinese companies are taking the lion's share of infrastructure projects across the region.

In Pakistan, whose geographical position makes it central to Beijing's "Silk Road" plans, contracts have been awarded for projects worth more than $28 billion – all by Chinese companies working together with local firms.

China Inc's main advantage, officials in both countries said, is the ability of Chinese banks – with the blessing of the government - to fast-track loans for projects related to the Silk Road.

"(Chinese companies have) that advantage because of the support of the Chinese government"

Dagha, who spoke to Reuters shortly before being transferred to the Commerce Ministry, said Beijing was fast-tracking loan approvals and pushing its banks and insurance firms to speed up due diligence work.

So, the greatest con game the world has ever witnessed has begun. Chinese money for chinese companies to buy chinese products and hire chinese labor to feed chinese people which will prevent another chinese revolt. CPEC, OBOR, Silk Trade...these are all old world land grab schemes.

"To get rich (with other people's resources and insecurities) is glorious"- Deng Xiaoping

We have to give it to Chinese for when they say they will build an infrastructure they build it. Unlike GOI which is always in near comatose whether building infrastucture inside India or abroad.

Reading news from different outlets and learning from visitors experience about the development across China, it feels more certain that China is in a more steady path of technological and economic advance than India. When they have a mandate to gain technology they make it happen.

Only way this path can be derailed is, if a lunatic like Hitler takes over the top post of the CPC and CMC and derail the nation's path of growth from trade and technology advancement to nationalism and racial domination. A rot has to start at the top. I thought south china sea issue will be a harbinger of that. But nothing much seems to be happening there. Instead they are more focused on developing institutions just as the americans did after the World War II.

India and China are working together to find common ground ahead of the summit in September of the BRICS (Brazil, Russia, India, China and South Africa) grouping, despite their differences over docking the Beijing-led Belt and Road Initiative (BRI) with the alliance in the future.

At a conference of political parties, think tanks and civil society groups of BRICS held in Fuzhou, The Hindu has learnt, the Indian and Chinese delegations failed to arrive at a consensus that the five emerging economies should formally support the BRI.{China is trying to isolate India}

The Fuzhou meet, organised by the Communist Party of China (CPC), is widely seen as an important component in framing the outcome of the BRICS summit that will be held in the Chinese coastal city of Xiamen in September.

The differences between the two delegations became evident when the text of the Fuzhou Initiative—an open document released at the end of the conference - was changed, on the insistence of the Indian delegation. Paragraph 14 of the first version of the Fuzhou Initiative had commended “the Belt and Road Initiative proposed by China”, for its “great significance for achieving development in developing countries…” However, since a consensus could not be achieved, the entire paragraph was dropped in the final version of the document, which was finally adopted at the conference.

A source privy to closed door deliberations, which resulted in recommendations for the BRICS summit as a separate “outcome” document, said that the Indian side, nevertheless, expressed its willingness to support individual connectivity projects, provided they were not tied up with the BRI.

India had boycotted last month’s Belt and Road Forum, hosted by China for promoting the BRI. But in an interview with The Hindu, BJP general secretary Ram Madhav said India’s decision was driven by “certain sovereignty related questions”, and should be treated as an “exception”, within the overall growth of India-China ties in the last three years.

The two delegations at Fuzhou also differed on establishing a permanent “Friends of BRICS” forum, which would include other countries outside the five emerging economies. {This is an attempt by China to include Pakistan to balance India off}

The source said, “All member-countries have an outreach programme. For instance, India at the last summit invited countries belonging to BIMSTEC. Under the outreach programme, we can give loans to everyone. The Chinese side during the Fuzhou conference has invited Laos, Philippines and Cambodia. That is fine. But embedding countries into the BRICS arrangement on a permanent basis, which might include Pakistan, through the Friends of BRICS club was not found acceptable.”

At a press conference in March, Chinese Foreign Minister Wang Yi proposed establishing a BRICS-plus arrangement, involving other countries with the grouping.

However, there was greater convergence among the delegates on other issues, including establishment of a BRICS financial institute, back up the existing contingency reserve arrangement of the New Development Bank of the emerging economies. “There is a suggestion to set up an institution on the lines of the IMF. It is not a bad idea but the location of the headquarters of such an institution is yet to be decided,” the source said.

India is keen on establishing a BRICS credit rating agency, while, so far, the Chinese have been focusing more on improving the methodology of the existing credit rating agencies. “But this might change after Moody’s downgraded China’s credit rating,” the source observed.

In his his opening remarks at the conference, Samir Saran, vice president of the New Delhi-based Observer Research Foundation (ORF) and leader of the visiting Indian delegation, proposed that the forthcoming Chinese Presidency of the BRICS must pursue the institution-building project, proposed by India in 2016, which included setting up research institutions, rating agencies and other bodies that promoted intra-BRICS cooperation.

Cyber security is likely to emerge as another important topic in the Xiamen summit. India, on its part, is keen on promoting digital economy, and is likely to back the existing working group on Information and Communication Technology (ICT), to comprehensively examine all aspects of cyber security.

Paul wrote:The old great game culminated in an understanding between the Tsarist Russia and Great Britain wherein the following agreement was reached (there were other parts of this agreement but focus is on the relevance for the subcontinent) :

1. The borders of Russian influence stops at the Amu Darya.2. Afghanistan is a buffer state but within the British sphere of influence.

When the British left India they did not want the Subcontinent to fall under Soviet hegemony, hence Pakistan came into the picture. However the northern regions of India which came into the closest proximity with Pakistan was a cause of concern. To address this : a buffer region between USSR and Pakistan called Wakhan corridor was created and given to Afghanistan (not sure about the date).

However the British being the cynical SOBs that they are, wanted to wear suspender and a belt at the same time. Hence they engineered the invasion of J&K state and gerrymandered the creation of POK and ensured it stayed in the hands of their proxies: Pakistan.

The utility of this arrangement is now under question due to Pakistan’s failing health. Also the new great game player: PRC wants risk free access to the oil rich regions of the Middle East. As a rising great power it inherits the interests of the west in ensuring India stays cut off from Central Asia.

Hence as I see it, there are two major questions facing the old great game players(West and Russia):

1. Should PRC gain access to middle east through the land route? If yes, then POK will go to PRC.2. USSR’s borders have receded to the regions hundreds if not thousands of miles west of Amu Darya. They are nowhere close to the POK region and the threat of communism subverting the subcontinent has receded. So should India be given land access to the Central Asian regions as well. If yes then POK should go to India.

If the answer is NO to both (1) and (2), then a new arrangement has to be worked out. This means new proxies have to be found to manage this geographically strategic region.

The answer to this to give a new lease of life to the time trusted Sunni alliance. The Taliban are the obvious choice. They will be a headache for all the major players – India and China. Not to mention Russia and Iran as well.

The other option – not necessarily exclusive to the option mentioned above is to break J&K as a separate state from India. POK can be part of this independent state and through these two proxies the offshore balancing strategy put in place by the west post WWII will be executed.

Last is ruled out with NAmO in Delhi.

Hence the Sunni NATO was created.At same time Russia brought in India as part of SCO.

From Foreign Affairs, November/December 2008 Summary: The crisis in Afghanistan and Pakistan is beyond the point where more troops will help. U.S. strategy must be to seek compromise with insurgents while addressing regional rivalries and insecuritiesBARNETT R. RUBIN is Director of Studies and a Senior Fellow at the Center on International Cooperation at New York University and the author of The Fragmentation of Afghanistan and Blood on the Doorstep. AHMED RASHID is a Pakistani journalist and writer, a Fellow at the Paci?c Council on International Policy, and the author of Jihad, Taliban, and, most recently, Descent Into Chaos: The United States and the Failure of Nation Building in Pakistan, Afghanistan, and Central Asia.

The Great Game is no fun anymore. The term "Great Game" was used by nineteenth-century British imperialists to describe the British-Russian struggle for position on the chessboard of Afghanistan and Central Asia -- a contest with a few players, mostly limited to intelligence forays and short wars fought on horseback with rifles, and with those living on the chessboard largely bystanders or victims. More than a century later, the game continues. But now, the number of players has exploded, those living on the chessboard have become involved, and the intensity of the violence and the threats it produces affect the entire globe. The Great Game can no longer be treated as a sporting event for distant spectators. It is time to agree on some new rules.

Seven years after the U.S.-led coalition and the Afghan commanders it supported pushed the leaderships of the Taliban and al Qaeda out of Afghanistan and into Pakistan, an insurgency that includes these and other groups is gaining ground on both the Afghan and the Pakistani sides of the border. Four years after Afghanistan's first-ever presidential election, the increasingly besieged government of Hamid Karzai is losing credibility at home and abroad. Al Qaeda has established a new safe haven in the tribal agencies of Pakistan, where it is defended by a new organization, the Taliban Movement of Pakistan. The government of Pakistan, beset by one political crisis after another and split between a traditionally autonomous military and assertive but fractious elected leaders, has been unable to retain control of its own territory and population. Its intelligence agency stands accused of supporting terrorism in Afghanistan, which in many ways has replaced Kashmir as the main arena of the still-unresolved struggle between Pakistan and India.

For years, critics of U.S. and NATO strategies have been warning that the region was headed in this direction. Many of the policies such critics have long proposed are now being widely embraced. The Bush administration and both presidential campaigns are proposing to send more troops to Afghanistan and to undertake other policies to sustain the military gains made there. These include accelerating training of the Afghan National Army and the Afghan National Police; disbursing more money, more effectively for reconstruction and development and to support better governance; increasing pressure on and cooperation with Pakistan, and launching cross-border attacks without Pakistani agreement to eliminate cross-border safe havens for insurgents and to uproot al Qaeda; supporting democracy in Pakistan and bringing its Inter-Services Intelligence (ISI) under civilian political control; and implementing more effective policies to curb Afghanistan's drug industry, which produces opiates equal in export value to half of the rest of the Afghan economy.

Cross-border attacks into Pakistan may produce an "October surprise" or provide material for apologists hoping to salvage George W. Bush's legacy, but they will not provide security. Advancing reconstruction, development, good governance, and counternarcotics efforts and building effective police and justice systems in Afghanistan will require many years of relative peace and security. Neither neglecting these tasks, as the Bush administration did initially, nor rushing them on a timetable determined by political objectives, can succeed. Afghanistan requires far larger and more effective security forces, international or national, but support for U.S. and NATO deployments is plummeting in troop-contributing countries, in the wider region, and in Afghanistan itself. Afghanistan, the poorest country in the world but for a handful in Africa and with the weakest government in the world (except Somalia, which has no government), will never be able to sustain national security forces sufficient to confront current -- let alone escalating -- threats, yet permanent foreign subsidies for Afghanistan's security forces cannot be guaranteed and will have destabilizing consequences. Moreover, measures aimed at Afghanistan will not address the deteriorating situation in Pakistan or the escalation of international conflicts connected to the Afghan-Pakistani war. More aid to Pakistan -- military or civilian -- will not diminish the perception among Pakistan's national security elite that the country is surrounded by enemies determined to dismember it, especially as cross-border raids into areas long claimed by Afghanistan intensify that perception. Until that sense of siege is gone, it will be difficult to strengthen civilian institutions in Pakistan.

U.S. diplomacy has been paralyzed by the rhetoric of "the war on terror" -- a struggle against "evil," in which other actors are "with us or with the terrorists." Such rhetoric thwarts sound strategic thinking by assimilating opponents into a homogenous "terrorist" enemy. Only a political and diplomatic initiative that distinguishes political opponents of the United States -- including violent ones -- from global terrorists such as al Qaeda can reduce the threat faced by the Afghan and Pakistani states and secure the rest of the international community from the international terrorist groups based there. Such an initiative would have two elements. It would seek a political solution with as much of the Afghan and Pakistani insurgencies as possible, offering political inclusion, the integration of Pakistan's indirectly ruled Federally Administered Tribal Areas (FATA) into the mainstream political and administrative institutions of Pakistan, and an end to hostile action by international troops in return for cooperation against al Qaeda. And it would include a major diplomatic and development initiative addressing the vast array of regional and global issues that have become intertwined with the crisis -- and that serve to stimulate, intensify, and prolong conflict in both Afghanistan and Pakistan.

Afghanistan has been at war for three decades -- a period longer than the one that started with World War I and ended with the Normandy landings on D-day in World War II -- and now that war is spreading to Pakistan and beyond. This war and the attendant terrorism could well continue and spread, even to other continents -- as on 9/11 -- or lead to the collapse of a nuclear-armed state. The regional crisis is of that magnitude, and yet so far there is no international framework to address it other than the underresourced and poorly coordinated operations in Afghanistan and some attacks in the FATA. The next U.S. administration should launch an effort, initially based on a contact group authorized by the UN Security Council, to put an end to the increasingly destructive dynamics of the Great Game in the region. The game has become too deadly and has attracted too many players; it now resembles less a chess match than the Afghan game of buzkashi, with Afghanistan playing the role of the goat carcass fought over by innumerable teams. Washington must seize the opportunity now to replace this Great Game with a new grand bargain for the region.

THE SECURITY GAP

The Afghan and Pakistani security forces lack the numbers, skills, equipment, and motivation to confront the growing insurgencies in the two countries or to uproot al Qaeda from its new base in the FATA, along the Afghan-Pakistani border. Proposals for improving the security situation focus on sending additional international forces, building larger national security forces in Afghanistan, and training and equipping Pakistan's security forces, which are organized for conflict with India, for domestic counterinsurgency. But none of these proposals is sufficient to meet the current, let alone future, threats.

The Pakistani military does not control the insurgency, but it can affect its intensity. Putting pressure on Pakistan to curb the militants will likely remain ineffective, however, without a strategic realignment by the United States. The region is rife with conspiracy theories trying to find a rational explanation for the United States' apparently irrational strategic posture of supporting a "major non-NATO ally" that is doing more to undermine the U.S. position in Afghanistan than any other state. Many Afghans believe that Washington secretly supports the Taliban as a way to keep a war going to justify a troop presence that is actually aimed at securing the energy resources of Central Asia and countering China. Many in Pakistan believe that the United States has deceived Pakistan into conniving with Washington to bring about its own destruction: India and U.S.-supported Afghanistan will form a pincer around Pakistan to dismember the world's only Muslim nuclear power. And some Iranians speculate that in preparation for the coming of the Mahdi, God has blinded the Great Satan to its own interests so that it would eliminate both of Iran's Sunni-ruled regional rivals, Afghanistan and Iraq, thus unwittingly paving the way for the long-awaited Shiite restoration.On September 19, 2001, when then Pakistani President Pervez Musharraf announced to the nation his decision to support the U.S.-led intervention against the Taliban in Afghanistan, he stated that the overriding reason was to save Pakistan by preventing the United States from allying with India. In return, he wanted concessions to Pakistan on its security interests.

Subsequent events, however, have only exacerbated Pakistan's sense of insecurity. Musharraf asked for time to form a "moderate Taliban" government in Afghanistan but failed to produce one. When that failed, he asked that the United States prevent the Northern Alliance (part of the anti-Taliban resistance in Afghanistan), which had been supported by India, Iran, and Russia, from occupying Kabul; that appeal failed. Now, Pakistan claims that the Northern Alliance is working with India from inside Afghanistan's security services. Meanwhile, India has reestablished its consulates in Afghan cities, including some near the Pakistani border. India has genuine consular interests there (Hindu and Sikh populations, commercial travel, aid programs), but it may also in fact be using the consulates against Pakistan, as Islamabad claims. India has also, in cooperation with Iran, completed a highway linking Afghanistan's ring road (which connects its major cities) to Iranian ports on the Persian Gulf, potentially eliminating Afghanistan's dependence on Pakistan for access to the sea and marginalizing Pakistan's new Arabian Sea port of Gwadar, which was built with hundreds of millions of dollars of Chinese aid. And the new U.S.-Indian nuclear deal effectively recognizes New Delhi's legitimacy as a nuclear power while continuing to treat Islamabad, with its record of proliferation, as a pariah. In this context, pressuring or giving aid to Pakistan, without any effort to address the sources of its insecurity, cannot yield a sustainable positive outcome.

India became the 71st country on Monday to join the United Nations TIR Convention, the international customs transit system, to position itself as a regional trading and transit hub.

The TIR system is the international customs transit system with the widest geographical coverage.

As other customs transit procedures, the TIR procedure enables goods to move under customs control across international borders without the payment of the duties and taxes.

TIR Convention is more than a transport agreement and has a strong foreign policy element.

In a world where China's 'One Belt One Road' (OBOR) is the dominating project straddling economics and geopolitics, India has no option but to play a better game if it wants to be counted as a serious rising power.

Welcoming India into the global transport arrangement, Umberto de Pretto, the secretary general of IRU which manages the TIR Convention, told TOI from Geneva that India's accession would have a big impact on regional connectivity. "TIR can help implement the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement by addressing policy incompatibility among the BBIN group. For example, Bangladesh does not recognise insurance policies made in India, Nepal or Bhutan. With TIR, there would be no need for bilateral arrangements as guarantors are covered by the global guarantee chain."

One of the persistent problems for India's connectivity projects has been the disconnect between transport and customs systems with different countries.

Once the systems are integrated with global norms, India reckons it will become easier to service African and Asian markets when the DMIC (Delhi-Mumbai Industrial Corridor) comes online.

It will breathe life into the International North-South Transport Corridor and the Chabahar project that India has been working on for some time.

China joined the TIR in 2016 when its giant inter-regional connectivity projects began to take off. As India ramps up its connectivity ambitions this is a necessary step. For instance, the BBIN motor vehicles agreement needs this convention to make it operational.

"BBIN MVA lacks any guaranteeing mechanism to protect customs revenue in the event of goods getting diverted to the national territory of the state through which it is passing. Without such mechanism, the MVA could not be operational," he said.

Joining the convention "would be a major economic boost to South Asia, eventually connecting the region to the rest of the world. It could become a key link between South and South-East Asia, particularly as China is already a TIR member, and connects transit routes east to Myanmar, Thailand, Laos, Cambodia and beyond".

He added it can link India to maritime transport routes across the entire Asia-Pacific region.

A statement from IRU (International Roads Union) said this was "part of India's multi-modal transport strategy that aims to integrate the economy with global and regional production networks".

Option 3:If Sunni NATO stabilizes then it's charter can be expanded to take on other fronts in addition to Iran. Hence Sunni NATO could have been the third option for controlling POK but PRC has become too big and powerful and wants Pakistan all to itself.

Question is: How long before US steps in to protect it's interests in Pakistan. We will have to see what Trump Sain's tweets say in the coming months. So far he has not said much about Pakistan. But the troop surge in Afghanistan is a heartening step indicating increased US presence in Af-Pak.

OT: I am one of the few on this forum who think India could get away with a few scratches on it's face dealing with Trump. One indicator in this direction is so far he does not appear to have moved in on the H1B issue which is close to India's heart....NM's visit in the coming days will reveal more on this.

Option 3:If Sunni NATO stabilizes then it's charter can be expanded to take on other fronts in addition to Iran. Hence Sunni NATO could have been the third option for controlling POK but PRC has become too big and powerful and wants Pakistan all to itself.

Question is: How long before US steps in to protect it's interests in Pakistan. We will have to see what Trump Sain's tweets say in the coming months. So far he has not said much about Pakistan. But the troop surge in Afghanistan is a heartening step indicating increased US presence in Af-Pak.

OT: I am one of the few on this forum who think India could get away with a few scratches on it's face dealing with Trump. One indicator in this direction is so far he does not appear to have moved in on the H1B issue which is close to India's heart....NM's visit in the coming days will reveal more on this.

KSA has removed its previous crown prince and put Salaman as the new Crown Prince. This shows they want to consolidate behind the new Sunni NATO, intervention in Yemen, and the standoff with Qatar as policy. It shows they are clearing their backyard and dissension in ranks.

I agree CPEC means China has decide Pakistan is not viable and hence has taken over. The CPEC chief is de-facto Chinese Viceroy of Pakistan. If China has taken over TSP, I see no US role there.The extra troops in Af-Pak are to ensure India doesn't move in during the interregnum. Its to support the CPEC only.

Afghanistan has to retaliate against the Taliban and its backers in Pak. if it wants to survive.

As of 2015, Indian merchandise export is 1.62% of global trade and import is 2.34% of global trade i.e is our share of global trade is about 3.96%.

So Bakistan hopes to generate traffic, to and from China, equivalent to total Indian import/export with this one port and one 6 lane road by 2020. Now that is building hawai mahal. This is a common sense compare/contrast kind of evaluation.

Longer term plans * Dredging of approach channel to depth of 20 meters * 150 berths to be built by 2045 * Capacity to handle 400 million tons of cargo per year

If the 2045 plans fructify, they hope to handle cargo equivalent to the current Indian import/exports i.e. about 4% of the current global world trade. Assuming proportional traffic distribution, based on the current build i.e 13 berths, they should be able to handle about 40 million tons of cargo at peak output i.e 0.4 % of global trade by their own calculation. If 4% traffic would fetch them $6-8 billion, then 0.4% traffic should fetch them not more than $600-800 million by 2020.

Plus there is the question of the road network backing the traffic over karakoram mountains. If a 6 lane highway can at max support 40 million tons of cargo then they will need to build 60 lane highway to carry 400 million tons of cargo.

Note: This is based on the rather simplistic linear scaling of data from Wiki and may not be accurate but does provide ballpark estimates.

The brokerage house anticipated exports to surge by 4.5% a year till fiscal year 2025, which is higher than the previous decade’s average of 3%. This is because of expectation of CPEC-led higher GDP growth in the coming years and positive impact on local industry. Imports are expected to grow by 4% in line with last decade’s average. Further, remittances are expected to grow within 4-4.5%. Services to China for transporting its trade cargo via Pakistan would generate $500-700 million per year for Islamabad. This amount may be exploited to pay back China’s debt for CPEC projects.

My estimate was based on linear scaling wrt Gwadar's current and planned capacity. Now that was under the assumption that the roads will be available 24x7 unhindered and it has sufficient traffic. We know that the 1st assumption is not true based on Shiv saar's research and the 2nd assumption too is optimistic.

Accounting for the assumptions, my best guess as of today for 2020 @ 25% capacity utilization, is $100-150 million dollar per year annual toll. With $11 billion in investment and $150 million revenue works out to be ~1.3% return of investment not sufficient to pay for itself far from generating *handsome rent* as flaunted by the bakis and parroted by some on this forum. Heck, it may not be sufficient to fund the annual maintenance charges. Now there are ancillary benefits like boost for local connectivity and savings on fuel on better roads, etc.

There are other hawai baten and some interesting facts but I will leave it for others to explore.

ramana wrote:I agree CPEC means China has decide Pakistan is not viable and hence has taken over. The CPEC chief is de-facto Chinese Viceroy of Pakistan. If China has taken over TSP, I see no US role there.The extra troops in Af-Pak are to ensure India doesn't move in during the interregnum. Its to support the CPEC only..

But CPEC will take at least 10 years to be complete. Can US stay that long in Af-Pak?

In pakistan this morning, i had an idea, after china takes over pakistan post CPEC ( a big if), can India use the quintessential pakistaniyat (terror+sooside+islam) to light the backyards of china. Afterall, 1. china is not giving the paki locals work, or any benefit now. 2. In future, the debt servicing will make pakis more austere (no lavish lifestyles for army and chaudhris)3. The chinese infestation will lead to cultural issues (read clashes between religion of peace and followers of buddhist ahinsa..ok ..ok atheism)Net net, they will see EIC redux.

Can't RAA at that time help our biraadars at that time (who knows CIA might join them too, US had vietnam, Soviets had afghanistan and chinese would have pakistan). The problems with that will be 1. Active Terror house lit with civil war right besides us (a bigger syria perhaps) 2. huge refugee problem: how many can be shot down at border and that too unarmed civilians if they decide to break fence with their hands3. China will certainly activate our eastern border in such cases or may be fuel insurgencies

Just asking the forum members if i should have flushed this idea in pakistan this morning itself?

There are 3 models of occupation takeover that I can think of. The American model cannot be termed as a occupation in the strict sense of the word.

1. The Chinese model: Use Han migration to change demography and takeover all of state functions including security/policing. Implemented in Tibet and Xinxiang. 2. The British model: Takeover all state functions including security/policing. The decision makers are all imports with another layer of local elites to interface with the mangos. The policing/security function is handled by locals overseen by imports.3. The American model: No imposition of imports. The state functions including security/policing stays with the locals. The local elites are co-opted by using saam, daam, danda and bheda. The local elites have total flexibility in decision making except where it concerns the overlords.

Is the classic Chinese model even possible to implement in Bakistan given its population(size, role of religion and fanaticism)?

The British model can be tweaked to suit the current environment. The Bakis can keep the top positions as puppets while the Chinese populate the next rung where the actual decisions are made while the lower rungs are populated by locals.

The American model is a very weak form of control and the Bakis have used the TINA card effectively to protect it *core* interests and extract jaziya. They know how to play that game.

The current situation resembles the American model where the Chinese, sitting in China, are trying to get their agenda implemented by the locals. E.g. The security of the CPEC corridor is still BakMil area of responsibility or at least that is the news with the creation of a 15,000 strong force.

The next step could be takeover of Balochistan and GB citing security concerns and under some kind of a *joint* force which will effectively pass control on to the Chinese. Beyond that, will the bakis allow overt Chinese presence in pakjab or sindh?

It will be difficult to go further and induct the Chinese into pakjab or sindh. The pakjabis have a record of turning on their benefactor. Even when the baki elites have all their wealth and progeny in the west they where unwilling to be pushed beyond a point. They have used the religious parties and the mullas to effectively push back against the American demand. While the Chinese have extended their veto umbrella to the Baki's the bakis are the only country with the willingness and heft to challenge India and tie it down in the region. Who knows but imagine the bakis using the India card with the Chinese! TINA factor on both sides.

I don't think the Chinese will even attempt the full British model for the fear of getting bogged down in the cesspool of fanaticism. If they do, it should provide us with an opportunity to use "Islam khetra me hai" against them. I believe India has the necessary *tools* to fan that flame better than any other country, excluding the bakis themselves, given our *shared* history and culture.

One has to wait to see how far the Chinese are willing to push and how far the pakjabi will get pushed. Interesting times ahead.

ramana wrote:Are you factoring the presence of Chinese on Pak mard-e-momin while Chinese servicing is in play?Goats will be in short supply.

This will have its impact in a generation or two when we will see Pakistan becoming East Turkistanfied.

the pakis have already "tightened" visa controls for the hans following the killing of two hans by pakis, ostensibly for "preaching/proselytising".

I think that the realisation that they are being scammed by the hans under the guise of CPEC is slowly gaining credibility and the local mango pakis have started to react.

there may be some sort of underground that will increasingly oppose the silent han occupation.

$60 billions odd may be a small price to pay for the kind of real estate assets and privileges/built in security/right of way etc that the hans will get in return.

the increasingly shrill noise from the controlled han and also paki media demanding/cajoling Indian participation in the CPEC is also an indication that the hans have majorly miscalculated the viability and risk factors of the project.

These han/paki reactions have only increased in magnitude after the BRI conference, indicating possibly that expected milestones in terms of global support as well as buy in for the han initiative may not have met set gate exit and entry criteria.

Aggression on the border breaking conditions of engagement that have held fast for 40 odd years is either a naked warning of things to come or signs of increased frustration for the hans at what they consider as Indian intransigence in "accommodating their reasonable views".

Increased paki hostility in cashmere is also han inspired and funded. Chinese weapons are increasingly being captured from paki terrorists. This cannot be a mere coincidence.

pankajs wrote:There are 3 models of occupation takeover . . . . .3. The American model: No imposition of imports. The state functions including security/policing stays with the locals. The local elites are co-opted by using saam, daam, danda and bheda. The local elites have total flexibility in decision making except where it concerns the overlords.[/b]

The classic Chinese model that you refer to as Option 1 can happen only within the far-flung regions of its own borders or what it claims as its borders like in Xinjiang, Tibet, Inner Mongolia, Manchuria etc. We must realize that the geographical boundary of China was fixed only in the 20th century. The country did not even have a name historically!

However, the Chinese Emperor ruled from his position midway between Heaven & Earth as the Son of Heaven. All he did was to demand and get tributes from other smaller kingdoms in return for allowing them to learn Confucian knowledge, custom and also get protection. That is exactly what the CPC, which is behaving like a traditional Chinese Emperor, is demanding from its tributes. The Confucian knowledge and custom are being spread through Pakistan by establishing 'Confucius Institutes' and other efforts at teaching Chinese language and associated culture. The vision document on CPEC prepared by China and revealed by DAWN a few weeks back, openly admitted to these efforts. Mao banished Confucianism through his Cultural Revolution, but it has since been restored especially by Xi.

As for 'protection' we know that Pakistan looks up to the Chinese these days for that. The continuous Chinese support for Pakistani position since the 1963 border agreement between these two nations is being formalized in the form of a 'Protectorate', if not a Province.

All that the Chinese Emperors cared about far-away lands was their regular tributes at the Emperor's court or whenever he sent his emissaries to their courts. Some of modern-day tributes for CPC from Pakistan are 18%-plus RoI on investments, Gwadar port et al. They don't need to physically occupy lands.

What the CPC has to guard against is the mistake the Americans made after defeating the Spanish in the Philippines. They thought that the Philippinos would welcome the Americans with open arms and warmth which didn't happen. However, the advantage to the CPC is that the Pakistani armed forces, politicians and Generals are in complete awe and support of the Chinese for various reasons.

The Protectorate strategy is American+ and that is also what I feel will happen. As I have stated in my earlier post even a full fledged British model is unlikely to be implemented in the whole of Bakistan. But stranger things have happened and it will be interesting to watch.

However, I do see a partial British strategy being implemented in GB and Balochistan, far away from the pakjabi homeland, perhaps in the form of special advisers to the local government or *joint* committee on security or some such arrangement. That *might* work without inviting robust response of the pakjabi jihadis.

The key question however is what happens in case of a Indo-Bak war? Will China intervene on behalf of its protectorate *militarily*? The bakis think that CPEC will create a redline for India and prevent a *forceful* response from India. The bakis are using CPEC to enmesh China in the defense of Bakiland OR rather they want the Indians to believe that. The bakis are banking on the Chinese to save their skin. It is strategic in that sense too.

Chinese will be happy to extract whatever they can from Bakistan and they certainly desire to get back their investment with high ROI. However lets say India hits a powerplant, one that is *billed* as a Chinese investment, will China intervene *militarily*? I don't think so. They will raise a stink but stop short of intervening on bakis behalf.

In short, CPEC will drain bakis economically while not deterring India from going to war. Neither of the twin objective that the bakis have for CPEC will be met.

Chinese are even more into war avoidance than us. They seem to love confrontation as long as they have the upper hand and the escalation ladder is in their control.

If India goes to war, its people will unite. There will be severe pain all around but the country will be intact. If China goes to war, its government and party system will probably fail, and that's not a risk they will be willing to take.

Sub-conventional warfare is a different story altogether and that is where we should focus on.

BEIJING: The construction of the $50 billion China-Pakistan Economic Corridor has been affected in the short run due to India's objections, a report in the state-run Chinese media said.

It added that if Beijing and Islamabad are firm in their cooperation, they can dispel New Delhi's doubts.

India is protesting against the CPEC as it passes through Pakistan-occupied Kashmir (PoK)"Some people believe obstruction by India may become a stumbling block to the development of the China Pakistan Economic Corridor (CPEC)," an article in the official daily Global Times said.

In fact, India's "rejection" is mainly because the corridor passes through the Pakistan-occupied Kashmir. The corridor's construction may be affected in the short term, but from a long-term perspective, China and Pakistan can dispel India's doubt to the maximum degree if they are firm about their cooperation and actively interact with neighbouring countries, it said.The article written by a researcher who worked in Pakistan said Chinese investments there could make profits.

"The return rate of the CPEC for China is generally higher than that in other countries. Pakistan is required to pay 17 per cent of the investment deposit for each project," it said, providing rare details about the conditions laid down for Chinese investments in Pakistan.

"At present, China has invested in 51 projects in the CPEC, with 19 already complete. Pakistan has announced that the total investment has reached $50 billion. That number is based on projects that are currently running, and the final number will exceed it," the article said.

In addition to the CPEC, China has invested in more than 200 projects in Pakistan. Its investment in the Hualong One Nuclear Power project near Karachi amounted to $6.5 billion, it said.

The investments mainly focus on energy and infrastructure, which are urgently needed for Pakistan's economic development.

It also sought to dispel fear about Chinese workers' safety in Pakistan after two Chinese were killed in Balochistan allegedly by the Islamic State terrorists.

"Many Chinese have serious concerns about the security environment and prospects of the CPEC after the recent kidnapping and alleged murder of their compatriots there," the article said.

"But I found the misgivings were not necessary after carrying out on-the-spot research at Chinese and local enterprises in Pakistan, and visiting scholars and research fellows at various universities and think tanks," it said.

The costs of China’s One Belt, One Road (Obor) project are sustainable and won’t reach into the trillions of dollars, says David Dollar, a former World Bank official and US Treasury emissary to Beijing.

The senior fellow at the Washington, D.C.-based Brookings Institution estimates that Obor shouldn’t cost more than US$100 billion annually, an investment that can be handled if China’s current account stays within its present range.

But Dollar warns that India, which has so far been reluctant to join Obor, must participate if China’s plan is to succeed. He also downplays the possibility of Chinese participation in President Donald Trump’s plan to rebuild US infrastructure.

Dollar spoke with Asia Times recently on Obor’s chances for success.

Q:Would the US help fund what some say are Obor’s US$1 trillion to US$2 trillion in estimated costs in return for Chinese help in rebuilding and financing US infrastructure?

A:The basic answer to that question is “no.” First of all, I don’t think there’s going to be trillions of dollars invested in Obor. The numbers, so far, are much, much smaller than that.

The leading financial agency for the project is the China Development Bank and it has so far reported US$160 billion dollars that it’s lent over a number of years. It’s a modest amount. It’s hard to believe that this would accelerate into the trillions unless you’re talking about 20-plus years.

Q:Would the US help in such financing?

A:The US, unfortunately, is not a major funder of infrastructure. The only way the US could contribute is through the World Bank and the Asian Development Bank (ADB). But the US has been reluctant to allow the two institutions to increase their role through capital increases. So it’s hard to see that the US would play much of a role in funding Obor.

Q:Would the US be averse to Chinese help in funding and participating in Trump’s infrastructure rebuilding plan?

A:There’s been a little talk of that. But I’m kind of skeptical that Chinese companies have any real comparative advantage here.

Some commentators have pointed out that capital is very inexpensive right now. The US can borrow at practically zero. So there’s not a financing problem — in the US it’s actually quite complicated from a regulatory point of view to build new infrastructure.

I think a big issue is that Americans are reluctant to pay a reasonable price to use infrastructure. If you accept you need to pay tolls to use roads, then it would be easy to finance roads in the US. But we seem reluctant to want to pay for this. So I don’t see how China can solve that problem.

Q:The Trump administration has hinted that the US will be more cooperative on Sino-US economic issues if China makes a major commitment to build US factories that employ American workers. Do you think such a tradeoff is possible?

A:We certainly see a lot of Chinese investment in the US. It’s mostly taken the form of mergers and acquisitions — so that’s not creating new jobs. That’s not the kind of greenfield investment like Toyota and others did in the past.

We may start to see some Chinese greenfield investment. But there are things that work against it. A lot of China’s manufacturing prowess [is based on its connection] to global value chains that are managed by western companies, or by Japanese and Korean companies. That, I think, limits the potential for Chinese greenfield investment.

But we’ll certainly see some and that will create new interest groups that see it benefiting US-China economic integration.

Q:China’s Asian Infrastructure Investment Bank (AIIB) and the Japan, US-led ADB are competing against each other in Asia. Could the two cooperate in funding Asian infrastructure projects and do you see any signs of this?

A:I think there’s actually quite good cooperation between the AIIB and the ADB. They are co-funding projects. That’s a rational way of spreading the risks and there are a lot of needs, looking at different funding sources. So I think AIIB is off to a good start and it’s going to give a little healthy competition to the ADB. But we also see them collaborating quite a bit and that’s positive for Asia.

Q: Is China’s current economic performance sufficient to sustain a project of Obor’s size?

A: As I said, some of the numbers being discussed for Obor are unrealistic. The actual level of activity is certainly no more than US$100 billion a year. China can sustain that.

The sustainable funding source for this is China’s current account surplus — and that’s in the range of US$200 to US$300 billion a year. That funds other things as well — including Chinese investment coming to the US and Europe. So I think the current level of outward investment from China is sustainable so long as they have this current account surplus — which seems to be the most likely scenario.

Q:What signals has India sent about participating in Obor and how important is New Delhi’s cooperation in China’s plan?

A:India’s been quite negative. They’re very aware that the core door that goes from China through Pakistan includes some territory that’s in dispute — in Kashmir, I believe. And so India is quite unhappy about that particular aspect in the larger Chinese project.

Q:How do you bridge such differences?

A:For Obor to really be a kind of Asia-wide project, you’d have to get a rapprochement between India and China. Probably China would have to recognize some of those Indian sensitivities. So as long as that’s not happening, that also limits the scale of Belt and Road.

Q:Why do you say that?

A:There are all these estimates of what kind of infrastructure needs there are in Asia. Well, a huge part of that is India. So if India is not buying into this, then frankly, a lot of those numbers people are talking about are not relevant.

Q:The Obama administration tried to ignore Obor. Is this changing under Trump and what might happen?

A:It’s definitely changing. In that first early harvest (trade agreement between the US and China) announced a few weeks ago, it was put into the agreement that the US recognizes Obor. The US also agreed to send a relatively high-level delegation to the Belt and Road Forum in May.

It was headed by Matt Pottinger, who is the Asia Director on the National Security Council. This is the first time that the US is kind of recognizing Belt and Road, which in some ways is just recognizing reality. Doing this seems like a smart policy.

But I worry at the same time that the Trump administration has pulled out of the Trans-Pacific Partnership (TPP). I saw the TPP as complementary to Obor.

Q:How was TPP complementary to Obor?

A:Belt and Road is financing a lot of physical infrastructure. But real integration of economies also requires harmonization of regulations and customs administrations. In the modern world, we’re also trying to break down barriers for services, trade and investment.

TPP had a lot of the “software” that’s needed for integration. There are also countries like Vietnam and Malaysia who are looking to China to finance infrastructure. But they were also looking to the US to set the rules of global trade and investment and now the US is pulling out of that. I find that worrisome.

One way we can counter the chinese narrative of being sissy (if needed) is that we offer alternative routes, say through Arunachal pradesh to show that we are in control and their intentions that CPEC is not at all about business but their expansionist agenda

What would happen if Sri Lanka were to default on the loans given by China?

Gora nations enforce their loans get paid through those lending institutions, color revolutions, sanctions, rating agencies, the dollar and of course through the US military might. when nations default they get severely punished.

How will China whose writ does not run beyond the South China Sea ensure its loans are honoured or is it like gora institutions back cheeni loans as well?

ramana wrote:Chetak, You didn't get the drift of my question! Read again and think about it.

Do you get the feeling that the entire project is now like an iceberg that has somehow floated right into the middle of a busy shipping lane?? with many actively manouvering to avoid the iceberg??

only the shiny top of the iceberg seemed to be visible with the hans pushing all the pros but glossing over the cons.

The hidden 90% is now fast getting exposed and in a manner that the hans are unable to control the narrative and also getting exposed in a manner that suggests that the hans are losing control. The BRI conference, in hindsight, seems to have been a bit of an own goal.

the han govt controlled media/think tanks have all shrilly started to chivvy India to try and get us to commit to the CPEC/OBOR, why??

For CPEC/OBOR to succeed, they suddenly need a complete buy-in from India?? They are now effectively pleading with us to take their sharp, shiny CPEC/OBOR knife and willingly cut our own throat. How did their risk analysis as well as detailed gaming of the CPEC/OBOR go so horribly wrong, if indeed it has?? what has unravelled and perhaps fundamentally changed some of their earlier assumptions, forcing them to correct mid course??

many of our foolish guys have tied this to India's entry into the NSG. This seems like an extremely short sighted and short term goal. The CPEC/OBOR threat is real, insidious and impinges on India's soverignity in a manner much more far reaching than the NSG ever could.

for a civilisation known for its subtleties and patient, long range planning with projected fruits/results accruable decades into the future, the hans certainly seem to have made a dog's breakfast of it in this case.

This CPEC/OBOR plan has been silently in the making for decades now. In its earliest form, it was an initiative to secure their energy sources and bypass the choke point of the malacca straits. It has been constantaly refined and the now recognizable contours of the CPEC/OBOR has emerged and it is still a work in progress as it undergoes fine tuning.

This dog's breakfast may even cause them to reassess their own top leadership.

Thanks for that! I did look up google uncle including the economist link and it tells you what happens to countries if they default on goras. Venezuela turned to China after it defaulted and the western financial markets shut them off. We all know the chaos that is venezuela is now despite all the oil. There doesn't seem to be clear case of any one country defaulting on cheeni loans since China lending is fairly recent and there is not much info on China's ability to enforce. It also appears that China loans to venezuela are being written off as NPA with no punishment coming from China.

In fact, what appears from all the articles is that China wants to de-risk meaning China does not have sticks and has only carrots. That's like a local moneylender without the thugs.

Maybe Latin and african countries are not defaulting because China is the only creditor available them to now. Perhaps we should encourage Sri Lanka to default in return for some kind of England-Scotland type agreement and setting up other dominoes to fall. It would be interesting how that turns out.

I suspect that this may explain the frenetic military building activity in IOR by China with Pakistan as the pivot. Is Pakistan to be the thug for hire who collects the loans on behalf of china until it becomes the equal to US? Pakis are experts in this area and the CPEC is probably to ensure that the rent-a-thug is firmly under control and doesn't develop ideas. However, India actively playing spoiler explains China getting a lot of Khujli. Interesting times as the cheeni saying goes.

We have to begin a "Boycott China" policy at home.Simply not buy Chinese goods.I cannot understand the GOI's policy towards appeasement of China by allowing the $50B trade deficit.Stapled visas another insult,which we simply swallow.Our MEA lack b*lls.We have never leveraged the two "T" cards in our hand either,Tibet and Taiwan. We too can demand China withdraw from Tibet as part of it belongs to India,citing ancient records and that it is an independent country,and allow the Tibetans to set up a full-fledged embassy in Delhi. Send an official delegation to Taipei and watch the Chinese hyperventilate.They too cannot go to war as it would show the whole of Asia and beyond of their true intentions.

However,thw riting is on the wall.Some kind of mil spat with China happening is a case of not "if" but "when".We have to take emergency measures on a war footing,beefing up or ,il strength on the border ,plus drawing up counter-offensive plans in the maritime sphere to sever China's maritime trade route to the Gulf should the sh*tworms war with us.

Heart of Eurasia: a Closer Look at the Key Region of China's New Silk RoadIn 2013, China announced its new strategy of economic development, called "One Belt, One Road," with the goal establishing a trade corridor across Eurasia to ensure swift and efficient transportation of goods from the east to the west on favorable terms. It has two main components: the Silk Road Economic Belt and the Maritime Silk Road.However, Alexander Gabuyev, chief of the Russia in Asian-Pacific Region program at the Carnegie Moscow Center, told RIA Novosti that the Silk Road project has so far failed to meet Russia’s expectations.

"So far Russia hasn’t seen much in ‘the belt and the road, because all those expectations about the influx of cheap or politically motivated money haven’t materialized," he said.

As Gabuyev explained, while China did make considerable investments in the Yamal LNG project and SIBUR via the Silk Road Fund, Beijing has merely used the fund as "a wallet which is not connected to the global financial system and therefore immune to the US sanctions."

And while China and the Eurasian Economic Union are currently negotiating on lowering the nontariff barriers between them, such negotiations will likely drag on for several years at least, he added.

All in all, Gabuyev remarked, whether or not China will be the only one to benefit from the Silk Road project depends on the negotiation skills of the parties involved and on "how they can assert their economic interests," adding that Beijing does not seek to force this project upon its neighbors.

Agasthi wrote:How will China whose writ does not run beyond the South China Sea ensure its loans are honoured or is it like gora institutions back cheeni loans as well?

If one looks at the countries to whom China has advanced loans for useless projects, these are the likes of Laos, Cambodia, Myanmar, Sri Lanka, Maldives, Djibouti et al. Now Philippines is planning to join the bandwagon. It was pathetic to see the boyish-looking Philippino Foreign Minister talking in Beijing the other day saying that we should all forget our nationalities and assume the uniform identity of 'Asians'! The UNCLOS ruling is thus dead and buried. Pakistan & North Korea are a different and unique kettle of fish. We shall leave them out. These countries are not going to return anything to China, nor was China intending to get anything back from them.

China stood by them at critical hours and provided them unstinting support (just as they do for Pakistan & North Korea). These countries are beholden to the Emperor far away and are His tributes. Again, countries like Laos, Cambodia, North Korea, Myanmar are accustomed to the Chinese tian xia during various Chinese dynasties. So, this subservient role comes easy to them and their obeisance was expected of them. Sri Lanka & Maldives need China by their side because of their continued geopolitical situation, as does perhaps Djibouti. This need has been exploited and equity has been converted into territory, diplomatic subjugation and strategic & tactical concessions.

Loans were a mere bait. Look at what China demanded from Colombo when Modi visited the island recently. It wanted to dock its submarine at Colombo at the same time. China will relentlessly pursue such diplomatic pressures and would expect Colombo to accede to such a request in future when an Indian PM or President goes there. When Colombo goes further down the Chinese drain, it map happen too. These are the returns it is expecting for the pittance it invested. When the MSR part of OBOR gets going, the troubles for these countries would become even more unbearable.

Make no mistake, OBOR is as well a politico-military project as it is economic and it targets India significantly.

Thanks, that means China does not have the same heft as the West. Then we should prod/encourage countries currently out of China's military reach to default before they put a global military machine in place. From whatever I have read (I may be wrong), it appears China is heavily in debt. A slight push on the trust front on RMB can bring the whole ponzi enterprise crashing down and what better way than to start with Sri Lanka or Dijibouti. Venezuela apparently has borrrowed 55-60 billion $ and if they and others can follow, that might give us more breathing space.